That 60 gallon tank of hot water in your basement eats up a lot of energy. But tankless on-demand water heaters leave you running water down the drain while you wait for warmth. This tiny Kickstarter water heater promises to change all that, and save you money, thanks to some fascinating technology.

The team behind the Heatworks Model 1 says the foot-long device can deliver instantaneous hot water on demand, saving 40% on energy costs and 10% on wasted water compared to an electric tank-style heater. One unit supplies enough endless hot water for one shower at a time, while larger households could install a unit at every bathroom, saving money on hot water piping and cutting out minutes spent waiting for hot water to arrive.

The key is how the Model 1 heats the water. Unlike current tankless electric heaters, which use a corrosion- and failure-prone metal coil, Heatworks relies on submerged graphite electrodes that use the water around them as a resistor. This, they say, gives you instant heat, rather than the 30-second wait associated with other tankless systems.

Sure, this all sounds great, and with the Kickstarter already past goal, it looks like Heatworks will have the money they're seeking to start production. But being funded on Kickstarter is entirely different from producing a reliable product in quantity. Even if they make it, are you willing to trade the familiar water heater any plumber can fix in the middle of the night for a high-tech energy saver that runs on the future? It's a gamble, and a cold shower is the loser's lot. [Kickstarter]

Update: Prompted by a number of comments asking whether there's any risk of being electrocuted by this device, we reached out to Heatworks for clarification. Founder Jerry Callahan explained via email:

Yes, we pass currents through the water, but here is why no one should be concerned;

Electricity takes the path of least resistance, which will be from one electrode to another

There are two "grounding plates" inside the unit for a second line of defense

If the unit shorts or electricity goes to ground, the circuit breaker will trip

The units will be tested and certified to UL Standard 499, which assures safety